The United States has invented whole industries—biomedicine and networked microprocessor computing—with government funding. Is a theoretical argument about hypothetical private sources of funding a good reason to stop ambitious public investment?
What’s more, when every developed or developing nation like the U.S. invests heavily in research, why should we embark upon intellectual adventurism? China is aiming to exceed U.S. research investment in real dollars by 2020. Is this the time to test out a pretty theory?
It’s not a theory! Consider what American industry has done even in this era of extensive government support for research. The iPhone, for instance—that’s a triumph of privately manufactured high technology.
Sure. But what about the funding of the more fundamental technology in iPhones and the like? As the economist Mariana Mazzucato has argued, many of the technologies that make the iPhone “smart” were brought into the world by government funding. Microchips, computer networking, Siri, and the Global Positioning System were all midwived by U.S. government agencies.
Maybe there’s a midpoint. What if government agencies competed for funding? A market-like environment seems to work well for actual companies. Government agencies and grant-writing organizations should adopt a more competitive, market-like approach.
If this plan works so well, why didn’t the Soviet Union develop the Internet first?
I’ll backtrack. Benjamin Peters, a professor at the University of Tulsa, has written a history of the U.S.S.R.’s furtive attempts to build a nationwide computer network, How Not to Network a Nation: The Uneasy History of the Soviet Internet. What he found was that the Soviet Union had the same kinds of actors at the same time as the United States: “brilliant scientists, ambitious agencies, committed bureaucrats.”
But here’s what was different: Institutions in the Soviet Union couldn’t, or didn’t want to, collaborate with each other. “These grandiose visions of what networks can do were breaking against the rocks of internecine bureaucratic infighting,” Peters told me.
“How do you get institutions that work together?,” he asked. “That’s what I’m super excited about. If some institutions can take a hit in the name of prudent long-term investments, then government plays an essential role in innovation.”
He also spoke up for the value of institutional hierarchy, and for institutions having clear but limited accountability to their superiors. “A lot of people argue that the Soviet state was too hierarchical,” he said. “But within particular non-military spaces, it wasn’t too hard but too flat.
“The problem with Soviet economic bureaucracy was not that it was too hierarchical and rigid so much as it was too pernicious and unpredictable,” he added in a later email. “One of the counterintuitive virtues of the military-industrial-academic complex in the West is the complex, which permitted cross-agency collaboration.”